Guest Commentary

In July 2010, the Pima County Board of Supervisors voted 3-2 to eliminate a program established in 1970 to provide affordable health insurance for retirees who were not yet eligible for Medicare. That decision resulted in 670 retirees losing coverage.

The decision—recommended by the county administrator and adopted by the three Democrats on the board—was made without a single meeting between retirees and county management to discuss possible options. Retirees requested meetings on this issue for at least six months prior to the vote, but these requests were rejected by the county. After the vote, the Pima County Retirees Association (PCRA) was formed to provide a forum for county retirees to share information and coordinate efforts to press the board to reinstitute affordable insurance coverage.

Pima County has justified its elimination of the program based on three major premises: Pima County does not have the financial resources to continue to provide the coverage; the cost to shift over to the Arizona State Retirement System-sponsored plan is minimal; and pre-Medicare retirees cost more to insure than active employees and are responsible for driving up Pima County's insurance costs.

PCRA has filed numerous public-records requests, and we can clearly refute two of these three premises:

1. Pima County does not have the financial resources to continue to provide the coverage. In fiscal year 2010-2011, Pima County has a $73 million budget surplus, according to an Arizona Daily Star report. Pima County and its carrier are also eligible to apply for a partial reimbursement of costs through federal reinsurance provided through the Affordable Care Act of 2010.

2. The cost to shift over to the Arizona State Retirement System-sponsored plan is minimal. The county administrator has consistently maintained that the out-of-pocket cost increase to retirees to switch would be $112 per month. An earlier memo, however, he refuted his own estimate: He stated that retirees save $3,000 per year by staying on Pima County insurance. This equates to $250 per month more out of pocket. PCRA conducted a survey which found that retirees are spending between $250 and $900 more per month.

3. Pre-Medicare retirees cost more to insure than active employees and are responsible for driving up Pima County's insurance costs. Pima County has consistently refused to provide information comparing pre-Medicare retirees with active employees of the same age. Pima County has also refused to answer questions about their insurance-carrier costs.

Important questions remain as to the real reason(s) for Pima County's rescission of the Retiree Insurance Program.

Why does Pima County refuse to provide an "apples-to-apples" comparison which would objectively determine if, in fact, pre-Medicare retirees are more expensive to insure than active employees in the same age group, as Pima County maintains?

In the county administrator's recent memo to supervisors, he discusses medical claims by current employees and mentions how low the usage has been over the last few years. This contradicts information received by PCRA from the human-resources director, claiming that Pima County doesn't track medical-claim information. Do they, or don't they? And if the usage was so low, why did Pima County cancel this option?

Why do Pima County and its carrier refuse to apply to the federal reinsurance program? Maricopa County continues to insure their retirees and has applied for federal reinsurance.

Why does Pima County continue to contract with a carrier whose most recent bid is millions of dollars higher than competitors? Why does Pima County contract with a carrier whose administrative costs appear to be two times the industry standard? Why does Pima County not have audit-ready records of payments made to this carrier?

The PCRA recommends that the Board of Supervisors immediately reinstate the Retiree Insurance Program, providing benefits promised, earned and paid for by Pima County pre-Medicare retirees; apply for federal reinsurance funds to help defray costs; and establish an outside audit/review committee (answerable only to the Board of Supervisors) to examine Pima County's health-insurance contract.